Zumiez Inc. reported sales decreased 7.7% for the second quarter ended Aug. 1, to $85.2 million from $92.3 million a year ago. The action sports retailer lost $3.1 million, or 10 cents a share, in the period after a charge of $1.3 million, or 3 cents a share, associated with the settlement agreement of a previously-disclosed lawsuit.
Comps decreased 18.8% versus a decrease of 1.7% for the second quarter of 2008. Net income in the second quarter of the prior fiscal year was $2.7 million or 9 cents a share.
Total net sales for the first six months decreased 5.3% to $162.0 million from $171.0 million. Comps decreased 17.2% in the latest period versus a decrease of 1.3% for the first six months of 2008. The company posted a net loss of $4.7 million, or 16 cents a share, compared to net income of $4.1 million, or 14 cents, a year earlier.
Rick Brooks, chief executive officer of Zumiez, said, “As the second quarter progressed, we experienced improved sales trends throughout the majority of our store base which allowed us to once again exceed our initial projections. We have worked diligently to provide the consumer with merchandise assortments that are both trend right and compellingly priced while at the same time maintain our product margins and protect the integrity of our brands. Despite the weak and volatile market conditions, we are encouraged with our ability to effectively manage our inventory and improve our cash position during a time when consumer discretionary spending is down. While comparisons do begin to moderate in the back half of the year, we believe it is prudent to remain cautious with regard to our near-term outlook until consumer trends stabilize and visibility improves. That said, we are optimistic about our future growth prospects and the long-term potential of our business.”
Outlook
The company is introducing guidance for the three months ending October 31, 2009 of net income of approximately 5 cents to 7 cents per diluted share. This guidance is based on an anticipated comparable store sales decline in the mid-to-low teen range for the third quarter of fiscal 2009.
Zumiez intends to open approximately 36 new stores in fiscal 2009 with an opening cadence similar to fiscal 2008. As of August 1, it operated 369 stores.
